Voluntary Beneﬁts–Make a New Year’s Resolution to Embrace Voluntary Worksiteby Mark Sylvester • Voluntary worksite beneﬁ ts can help employers facing higher deductibles and employees facing increased premiums. That’s why offering voluntary benefits has emerged as the most likely solution to these changes. With a new year upon us, now is the perfect time to embrace voluntary beneﬁts.

Life Insurance–IRS Goes After Captive Insuranceby Lance Wallach • Taxpayers must report certain transactions to the IRS under Section 6707A of the tax code, to help detect, deter, and shut down abusive tax shelter activities. Find out the proper way to approach this problem.

COBRA News Update
In this edition of the COBRA Update, we cover how the Dept. of Labor wants to take a look back at COBRA subsidies, COBRA FAQs for employers, and the availability of a new War and Peace sized CBRA handbook.

Defined Contribution–Deﬁning the Future of Deﬁned Contributionby Ron Goldstein • As the marketplace prepares for the changes that will accompany full implementation of the Patient Protection and Affordable Care Act over the next two years, more and more employers are beginning to seriously consider deﬁ ned contribution as key to their healthcare beneﬁ ts strategy.

Voluntary Benefits: Feeling Your Client’s Pain: Voluntary Benefits As a Value-add Can Be An Opportunity

by Art Brooks

It has been said before that every new challenge provides an opportunity. How can we maintain the cost of benefits and still provide employees with added value beyond their salary and compensation plans? It’s a question corporations are asking and an opportunity for brokers and producers to step forward with alternatives that can offer new solutions.

A recent survey of large companies by the National Business Group on Health found that employers estimate that their healthcare benefit costs will increase by an average of 8.9% in 2011, compared to an average increase of 6.9% in 2010. The average total healthcare premium per employee for large companies will be $9,821 in 2011, up from $9,028 in 2010 and double what they paid in 2001, according to HR and outsourcing consulting firm Hewitt Associates,

Because of trends like this, many employers are looking to flexible savings accounts (FSAs), non-insurance voluntary benefits, and other options to boost benefit offerings.

We are seeing employers offering everything from auto and home insurance, 529 college savings plans, deferred compensation, estate planning, profit sharing, and stock options, to fitness programs, lunch programs, medical opt-outs, pet care, and uniforms, to name a few. Organizations can maintain higher employee satisfaction when workers see a lot of value in non-insurance voluntary benefits.

Brokers and producers can be an excellent resource to HR in identifying these alternatives. Even for companies that may not yet be considering voluntary benefits, brokers can educate HR and corporations about the benefits of offering these options at little or no cost to them. The cost of health club memberships, discounts on supplies, and other benefits may be low to the corporation, but their value may rank high among employees. Employees may feel the company has their best interest in mind and has leveraged its buying power to offer a better deal.

Employee audits can help to determine which non-insurance voluntary benefits might make the biggest impact. Brokers who have forged valuable relationships with clients can assess the needs of the employee base, offer new and often more cost-effective alternatives, and provide creative options to employers’ traditional plans. Brokers and producers can also help organizations determine the answers to questions such as, “Would employees benefit from a selected program or would they prefer to have greater options in selecting specific benefits that meet their needs?”

Brokers can implement technology to assess employee demographics and do surveys to find pain points and other sources of need from employees.

Make it easy. As employers look for innovative ways to manage rising benefit costs, brokers and producers can play a pivotal role in helping to manage information about more complex offerings. Brokers can provide access to technology to manage a greater number of benefits options. A benefit management system can make it easy for HR to keep track of information and for employees to enroll and make changes. As plans and options grow in complexity and number, technology is essential to make sure the company is not overpaying or insuring dependants and others who are not eligible.

For brokers, the increasing costs and growing uncertainties in the benefits market are challenges and opportunities to grow client relationships. The most successful brokers and producers pursue options and look for new opportunities to address prospects’ needs. q

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Art Brooks is with BeneTrac, a Paychex company and provider of powerful, web-based electronic enrollment and employee benefits administration software used to manage benefit information. He can be reached at abrooks@benetrac.com

Voluntary Benefits–Make a New Year’s Resolution to Embrace Voluntary Worksite

by Mark Sylvester

During the past few years, the consumer healthcare landscape has seen dramatic changes due to legislative reform and employers’ cost-cutting efforts during the recession. Voluntary worksite benefits can help employers facing higher deductibles and employees facing increased premiums.

That’s why offering voluntary benefits has emerged as the most likely solution to these changes. With a new year upon us, now is the perfect time to embrace voluntary benefits.

Why Voluntary Worksite?

The ideal voluntary worksite benefit suite can help employers provide a competitive benefit program without affecting their bottom line. It can also help offset high deductible costs for employees. If your clients are asking about a high-deductible medical plan or already considering one, it’s the perfect opportunity to communicate how voluntary benefits can provide workers the options they need and want to help protect their families. In fact, employees have indicated, in various industry studies, that they want voluntary coverage and are willing to pay for it.

Additionally, you have to remain competitive and evolve your portfolio of products in order to keep up with the changes in the benefit industry and position yourself for long-term success. You may also have to evolve your mindset. It’s a significant change in the way many of us approach our business and change isn’t always easy. To ease into it and to help make the evolution as smooth as possible, here are a few things to keep in mind:

Take a Holistic Approach

To provide as much value as possible to your clients, it is important to look at their overall business needs. Today, it likely means going beyond the traditional health, life, disability, and dental offerings. To help reduce a client’s risk and provide their staff with the benefits they need and want, you must often consider including accident, critical illness, cancer, and gap insurance.

For example, one of our broker partners had a client facing significant premium increases with the current health plan. The first thought was to increase deductibles. After further discussions, the broker discovered that the employer also wanted to reduce the risk on its 100% employer-funded health reimbursement accounts (HRA). The broker recommended that the employer change from its 1000, 2000 health plan to a 2000, 6000 plan and then implement gap (4,000, 2,000) coverage to reduce its risk on the HRA. As a result, the broker provided a cost-neutral solution and capped the risk on the employer-funded HRA. This recommendation has the potential to save his client approximately $80,000. The shift also created an additional premium from which the broker is receiving a commission.

Consider the Benefits of A Group Versus Individual Platform

When putting together a comprehensive benefit plan that includes voluntary, it is essential to weigh the benefits to the employer, the employees and you of a group plan versus an individual plan. Group platforms often offer employers more flexibility when it comes to pricing and customization and the enrollment process can be more cost effective. For employers with personnel in more than one state, all workers will get the same policy form, which can ease administrative hassles.

In addition, a group platform provides the opportunity to look at all coverages and how they work together. You can identify gaps that could result in employees not being covered for a period of time and eliminate overlaps, which could cost more than necessary. For example, an employer that offers a 52-week short-term disability plan doesn’t need a long-term disability plan that begins 90 days after the disabling incident. Also, employers that provide workers’ compensation coverage may want non-occupational rather than 24-hour accident coverage. A group plan may offer brokers a new and steady stream of revenue that pays a level commission over several years instead of a large commission in the first year and smaller commissions in subsequent years.

Plan Ahead For Enrollment Success

Because benefits are one of the most important aspects of job satisfaction, it is imperative to educate workers about the following:

• The value of their benefits.
• Changes that are coming due to healthcare reform and the economy.
• The importance of being an informed consumer.

One of the best ways to do this is through a carefully considered enrollment experience. Every employer and employee base is different, so work closely with their human resources team, well in advance, to discuss and develop an enrollment plan, and agree on expectations and deliverables. You should include your provider partners and enrollment coordinator to leverage their enrollment resources and services.

Staff members need to know their options and be prepared before enrollment starts in order to make good decisions about their benefits. You may want to consider pre-enrollment communications, such as posters, payroll stuffers, e-mail campaigns, and personalized enrollment materials. It’s also helpful to take an educational approach with personnel, rather than a hard-sell approach. Some providers have salaried, not commission-based, benefit counselors who are trained to explain the ins and outs of the benefit package.

Depending on the employees, the work environment, the number of locations, and other considerations, you may want to recommend mandatory group meetings, followed by mandatory or voluntary one-on-one meetings with the benefit counselors. Most brokers I’ve visited with achieve the greatest participation and employee satisfaction from one-on-one meetings. One-one-one meetings give workers a better education about their benefit options to help them make the right choices for their lifestyle and family situation.

Enrollment can also be conducted using paper, laptop, and online forms or a combination of methods. Laptop enrollment is often ideal because it allows employees to make their choices and complete enrollment immediately, which streamlines the process.

Though our industry is quite different than it was a few years ago, your role as a broker has never been more important. By embracing voluntary worksite benefits, you can provide your clients with a tangible value that they can feel confident offering and their workers will appreciate.

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Mark Sylvester is vice president of voluntary sales at Assurant Employee Benefits, a leading provider of quality employee benefits and services, including long-term and short-term disability, life insurance, vision insurance, voluntary benefits such as cancer, critical illness and accident, dental coverage, and disability. He can be contacted at Mark.Sylvester@assurant.com or 816-881-8609.

Voluntary Benefits–Survival Is Voluntary And Vice Versa

by John Burke

Change is coming to the world of health insurance and change like this has not been seen since Medicare was implemented 45 years ago. The world of employer/employee life and health plans in 2015 will probably look different from what we have grown used to.

Many in the health insurance field believe that brokerages are in for a period of consolidation and that some will fall by the wayside. Just as wise investors diversify their portfolios to keep their money safe, it’s time for you to adopt strategies that will give you the best possibility of success in the post-2014 environment. Our recommendation: start selling voluntary employee benefit plans.

Of course, predicting the exact nature of the change in health insurance is difficult under the best of circumstances, and predicting anything that is contingent on legislative and judiciary action is far from the best of circumstances. Do an Internet search and you’ll find that a number of widely respected organizations have published well-designed studies with contradictory findings about what will happen to employer/employee plans. In the face of this uncertainty, we contend that selling voluntary plans along with your traditional employer/employee plans is a strategy that will help you in almost any foreseeable future and one that will generate additional income for you while that future approaches.

New To Voluntary Coverages? Here’s What You Need To Know

What are the differences between traditional products and coverages and those offered to employees on a voluntary basis? Simple. If you’re dealing with a carrier that is strong and experienced in this market, and when benefits and exclusions are equal, the only difference is the way premiums are funded: paid by the employer or paid by the employee. If you know life and health coverages – and of course you do – you already have all the product knowledge you need.

What kind of carrier should you look for?

• Test your carrier by taking a look at its critical illness product. Here’s a product, unlike most others, that has grown and matured largely within the voluntary marketplace. Does your proposed voluntary carrier have this product? How well designed is it, and more importantly, how committed is your carrier to its success?
• Look for carriers that are offering add-ons that make its products attractive to employees even before a claim needs to be made. Some carriers offer services like online will preparation; extensive wellness programs that promote, dental health, for instance; and even employee assistance programs, which deal with work/life situations that can make employees less productive or lead them to file claims.
• Be prepared to take an active role in the solicitation of employees. Traditional life and health coverages have largely been offered by employers on a “here it is” basis that requires little thought on the part of employees. Voluntary coverages, on the other hand, require much more thought and consideration. You will have to take a strong hand in convincing employees of the worth of your offerings and the limited period of time they have to make a decision to avoid having to supply evidence of insurability at a future time, or even being shut out altogether.
• Insist on a carrier with flexibility, one that will work with you to devise a plan, pricing, and administration that best suits your client. That kind of flexibility comes from carriers that believe in voluntary plans and are strongly committed to their success.

Employers May Be Hesitant. Here’s What They Need To Know

If employers have never offered voluntary plans, not knowing how these plans work may make them hesitate. You have some educating to do.

With many employers facing budget crunches and with healthcare costs heading upward, you can anticipate that the amount of money available to fund employee benefits is holding steady or heading down. Even with today’s employment market, where employers hold most of the cards, a good benefit package is still considered vital to attracting and retaining the best employees. One way to offer a comprehensive benefit package is to offer some of the benefits on a voluntary basis, with employees paying the entire premium.

Help your clients get into the world of voluntary benefits by introducing them to just one product to start with. This is, again, where a critical illness product can be your friend. It’s relatively new; it’s proven to be very attractive to employees in companies where it’s been offered; and it offers a great way for employers to get their feet wet with voluntary plans. Once they see that the plan is easy for them to administer and that it is popular with their employees, the door is open for you to offer more and more benefits on a voluntary basis.

Note that sentence in the last paragraph, “The plan is easy for them to administer.” Here’s another test of your carrier. We said that your carrier should be flexible about administration, among other things. An employer with a biweekly payroll cycle will not look kindly on a carrier that can only accept premiums on a monthly basis. Make sure you choose a carrier that can make your life and your client’s life easy.

Even With All The Changes Ahead, The Basis Of Our Business Will Not Change

Relationships are and will remain the basis of the insurance business – your relationships with your carriers and with your clients. Trust is the foundation of those relationships. If there is mutual trust between you and your carriers, you can work together to devise strategies to remain successful no matter what healthcare reform may do to change the landscape of our business. Similarly, if there is mutual trust between you and your clients, they will be receptive to the advice and counsel you give them on offering the best to their employees at a price that fits their budgets.

Don’t wait. Start planning for voluntary coverages now. Look for carriers that offer them. Introduce them to your clients. Make everyone in your organization comfortable with discussing and implementing them.

This article started with a mention of Medicare. When that plan was implemented in 1966, I’m sure many brokers predicted doom. But for others – the ones who were open to new ideas – Medicare created the opportunity for new and unexpected sources of income. Our generation now faces similar challenges. Offering voluntary coverages is a great way to begin to address them. q

Life Insurance–IRS Goes After Captive Insurance

by Lance Wallach

Life insurance agents recently started pushing the newest variety of high-ticket items. After the IRS almost put 419 plans out of business and severely curtailed abusive 412i plans they needed another way to sell large commission life insurance policies. Many of the promoters of the 419 and 412i plans are now promoting section 79 and captive insurance plans. They claim that these plans allow businesses to tax deduct life insurance. As in the past, these promoters claim that most of the benefits would be for the business owners. I have been an expert witness in many cases against these abusive plans and my side has never lost a case.

Recently, my office has been receiving over 50 calls per month from people that are being threatened with large IRS fines. Most of these people (including CPAs) do not understand why this is happening. These fines are primarily the result of greed from insurance companies, insurance agents, plan promoters and even the IRS. Insurance companies are always looking for ways to sell large amounts of life insurance. Taxpayers are constantly looking for larger tax deductions. Insurance agents want to earn large life insurance commissions. The IRS has started additional enforcement action against taxpayers and accountants.

Taxpayers must report certain transactions to the IRS under Section 6707A of the tax code, to help detect, deter, and shut down abusive tax shelter activities. For example, reportable transactions may include participants in 419,412i, or other insurance plans sold by insurance agents for tax deduction purposes. Other abusive, listed, or reportable transactions could include captive insurance and Section 79 plans, which are usually sold by insurance agents for tax deductions. Taxpayers must disclose their participation in these and other transactions by filing a Reportable Transactions Disclosure Statement (Form 8886) with their income tax returns.

People that who these plans are called “material advisors” and must file form 8918 properly. Failure to report the transactions could result in huge potentially heinous monetary penalties. Accountants who sign tax returns that claim these deductions can also be called material advisors and should also file form 8918 properly.

Not all 412i,captive insurance and Section 79 plans are abusive, listed or reportable transactions, but almost all the Section 79 and captive insurance plans that I have recently seen are abusive. Recently I have had discussions with IRS personnel on point. But even as far back as 2002, I spoke at the annual national convention of the American Society of Pension Actuaries on potential abuses. I also was asked by the then acting IRS commissioner to meet with high level IRS executives to further discuss these issues. At this meeting with senior IRS officials, there was a speakerphone so that high-level Treasury officials could listen in on the conversation. Within a year of this meeting, the IRS escalated its attack on participants in 419 Welfare Benefit Plans.

The IRS has fined hundreds of taxpayers who did file under 6707A. They said that they did not fill out the forms properly, or did not file correctly. The plan administrator or a 412i advised over 200 of his clients how to file. They were then all fined by the IRS for filling out the forms wrong. The fines averaged about $200,000 per taxpayer.

A report by the Treasury Inspector General for Tax Administration (TIGTA) found that the procedures for documenting and assessing the Section 6707A penalty were not sufficient or formalized, and cases often are not fully developed.

TIGTA evaluated the IRS’s effectiveness in identifying, developing, and applying the Section 6707A penalty. Based on its review of 114 assessed Section 6707A penalties, TIGTA determined that many of these files were incomplete or did not contain sufficient audit evidence. TIGTA also found a need for better coordination between the IRS’s Office of Tax Shelter Analysis and other functions.

The Section 6707A penalty is a stand-alone penalty and does not require an associated income tax examination; therefore, it applies regardless of whether the reportable transaction results in an understatement of tax. TIGTA determined that, in most cases, the Section 6707A penalty was substantially higher than additional tax assessments taxpayers received from the audit of underlying tax returns. I have had phone calls from taxpayers that contributed less than $100,000 to a listed or reportable transaction and were fined over $500,000. I have had phone calls from taxpayers that went into 419 or 412i plans, made no contributions, but nevertheless were fined a large amount of money for being in a listed transaction and not properly filing forms under IRC section 6707A. The IRS claims that the fines are non-appealable.

If you are, or were in a 412i, 419, captive insurance or section 79 plan you should immediately file under 6707A protectively. If you have already filed you should find someone who knows what he is doing to review the forms. I only know of two people who know how to properly file. The IRS instructions are vague and are useless if you are filing late since they presume a timely file. If a taxpayer files wrong, or fills out the forms wrong he still gets the fine. I have had hundreds of phone calls from people in that situation.

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Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He writes about 412(i), 419, and captive insurance and section 79 plans. He speaks at conventions and writes for more than 20 publicationsand has been featured on television and radio financial talk shows He has also written numerous books. He does expert witness testimony and his side has never lost a case. Contact him at 516.938.5007, wallachinc@gmail.com, or visit www.taxaudit419.com or www.taxlibrary.us.

Dental Insurance–Helping Kids Develop Contagious SmilesUnderstanding the Role of Dental Within Healthcare Reform

by Karen M. Gustin, LLIF

A child’s toothy smile can be contagious, communicating joy and happiness. Likewise, the lack of a smile also may express unhappiness, frustration or discontentment. Often kids with oral health concerns are reluctant to smile or laugh because of pain or embarrassment.

Facing a Lifetime of Oral Health Problems

Nearly six out of 10 kids in the United States have cavities, and about 25% have untreated decay in their permanent teeth, causing the U.S. Surgeon General to call kids’ tooth decay a silent epidemic.

Dental experts have determined that the root system from baby teeth helps lay the foundation for permanent teeth. If kids have damage from cavities at a young age, they may experience a lifetime of tooth and gum problems. More than 80% of tooth decay in kids occurs on the chewing surfaces of teeth. Dental sealants are a viable solution to protecting these teeth, but only 18.5% of kids have at least one sealed permanent tooth.

Medical studies indicate that nearly all children and teens have gingivitis, the precursor to a periodontal disease. If left untreated, the disease eventually can advance to more serious oral concerns that can require extensive dental treatment and care, including emergency room visits, hospitalizations and delayed physical development.

Physical Challenges of Tooth Decay

Kids with oral health problems also experience other physical challenges due to aching teeth and gums, such as discomfort eating and chewing food and problems sleeping. They often struggle to listen and learn at school. In fact, kids lose more than 51 million school hours each year due to dental-related illness. Tooth decay has become one of the most common health issues that kids face today. It is one of the most common diseases of childhood; five times as common as asthma and seven times as common as hay fever or bronchitis.

Dental Insurance With Healthcare Reform

Although the oral health of children has improved dramatically throughout the country, there remains a significant concern with many kids not having access to good dental care. This issue should be addressed through the Patient Protection and Affordable Care Act (PPACA), scheduled for implementation in 2013. We anticipate that many specific directives for pediatric oral services will be determined this year. In preparation for these decisions, consider the following suggestions:

Understand Dental Care Issues

The dental focus of healthcare reform is to provide essential benefits for American children. Currently the age range for these benefits has not been defined and the benefit options and plan design have not been determined. The following questions need to be resolved:
• What are the essential benefits for pediatric oral services?
• How should these plans be designed and administered?
• When will the plans commence?
• Who is responsible for ensuring kids register and participate in dental plans?
• What tracking mechanism will be used to assess improvements in kids’ dental care throughout the country?
• If parents want additional oral care benefits for their dependents beyond the essential services, can they add their dependents to their dental plan or purchase an individual plan?

The National Association of Dental Plans has created a helpful document that thoroughly reviews the issues and discussions on essential pediatric oral services: www.nadp.org/Libraries/Newsletter_Links/Dental_Exchange_White_Paper_v9-9-11-3.sflb.ashx.

Identify Current Plan Dependents

The government’s requirements may mean that some children will have a dental plan that’s independent of their parents’ benefits. Producers and employers can start reviewing benefit records and developing a list of dependents receiving dental care through their parents’ plans. Employers should gather information to confirm the birth date of each child. Developing this list now will help employers be ready for the forthcoming changes.

Separate Dental Insurance Plans

Dental remains an excellent employee benefit that can be offered by dental companies and does not need to be combined with medical insurance plans. Employees can continue to enjoy dental benefits from dedicated dental insurance carriers that understand the complexities of processing dental claims and focus on providing quality care, flexible plan designs and customer service support.

Dental Is Important Outside of Reform

Many employees enroll in dental plans in order to provide good oral care for their dependents. Since PPACA focuses on providing only pediatric dental care services, health professionals fear that some employees may decide to discontinue their dental benefits. If so, will they maintain preventive oral care with daily tooth brushing and flossing, and pay the out-of-pocket costs for regular cleanings and checkup appointments?

Educate Employees

Producers and employers should help employees understand the value of their dental benefits. This is especially important for younger employees who may not appreciate the full worth of their benefits. Many in this age group grew up enjoying good healthcare coverage through their parents’ plans and may not recognize the need for their own dental plan. Consider these suggestions for messages to share with employees:
• Develop a regular plan for conveying the value of dental benefits, including cost savings, covered services and preventive care options that may be helpful in identifying health risks in the early stages.
• Supply reminders to schedule regular appointments for dental checkups and cleanings to maintain good oral health.
• Explain that dentists often can detect signs of more than 120 health concerns during an exam, which may be helpful in avoiding unnecessary medical costs.
• Provide parents with friendly reminders on the importance of helping their kids develop good oral health habits, including daily tooth brushing and flossing, scheduling dental checkup exams when their child has his or her first tooth or before age 1 and thereafter as directed by their dentists, and encouraging kids to consume nutritious foods and drinks that are low in sugar.

Adjusting to Healthcare Reform

As we wait for decisions on the dental focus within the healthcare reform, producers have an excellent opportunity to work closely with employers to help them understand the upcoming changes, including tracking dependents and implementing plans for pediatric dental care. To keep current with changes and find appropriate solutions for employers, partner with a trusted insurance carrier and sales representative who can interpret the impact of future changes.

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Karen M. Gustin, LLIF, is senior vice president – group marketing, national accounts and block acquisitions for Ameritas Group, a division of Ameritas Life Insurance Corp. (a UNIFI company), with headquarters in Lincoln, Neb. A leading provider of dental and vision products and services, Ameritas Group added hearing care to its product portfolio in 2008. Gustin joined Ameritas Group in 1983. She chairs the National Association of Dental Plans board of directors.

For more information on pediatric oral care options with PPACA, review the NADP abstract at: www.nadp.org/Libraries/Newsletter_Links/Dental_Exchange_White_Paper_v9-9-11-3.sflb.ashx.

Dental Insurance–Improving Recruitment and Retention With Dental Benefits
Benefit Managers Prefer to Work with Dental Carriers that Focus on Improving Oral Health

by James Bramson, D.D.S

Toay’s benefit managers want to do business with dental carriers that understand and embrace the connection between oral and overall health. In fact, nearly two-thirds of respondents from a recent National Association of Dental Plans (NADP) survey say they prefer to work with a dental carrier that focuses on improving oral health.

Benefit managers recognize that dental benefits play an important role in recruitment and retention strategies. The NADP study reveals that participants rank dental coverage third in importance when it comes to benefit offerings — only behind health insurance and retirement savings plans.

The online study, conducted by Perry & Company from Baton Rouge, La., included more than 1,400 employee benefit managers and decision makers from across the nation. Key findings from the study include the following:

• 49% of participants see dental benefits as essential to employee recruitment/retention.
• 80% of participants offer dental benefits.
• The number of companies offering dental benefits is increasing, especially in companies with 100 employees or less.
• Two-thirds of companies that purchase a dental plan use a broker/producer.

Of those companies that offer dental benefits, dental wellness ranks within the top 10 important features of a dental plan. These companies also believe that selecting a dental plan is a strategic business decision and see their dental carriers as valuable business partners.

So what do the findings mean for today’s dental insurers? For carriers, they mean using scientific evidence to develop products that enhance employee wellness and help reduce costs. Significant research exists that that links the oral health of your mouth to other medical conditions, such as diabetes, coronary artery disease and pre-term infant birth. As such, dental carriers are increasingly designing plans that encourage preventive treatments and educate employees on the value of improved dental health — understanding that employers may ultimately benefit through lower medical claim costs and absenteeism.

The NADP findings also mean that dental carriers should start thinking about the financial impact oral care has on healthcare costs. Working toward a more integrated system in which communication, education and treatment are all better coordinated should result in lower cost and better healthcare.

Producers can play a significant role in helping clients become more knowledgeable about dental benefits. As a key conduit for the purchase of dental coverage, producers can help their clients take into consideration a number of elements that can improve oral health, including the type of services that are covered, network access, and a commitment to improving overall health through plan designs and education that promote good oral health.

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Dr. James Bramson is chief dental officer at United Concordia, where he directs the professional relations department, professional quality assurance activities, utilization review, claims review process and clinical aspects of product offerings and communications. Dr. Bramson has 30 years of dental industry experience, including national experience as executive director of the American Dental Association (ADA) and secretary of the ADA Foundation. For more information, contact United Concordia at 888-884-8224, or www.UnitedConcordia.com.

COBRA News Update….

by Leila Morris

In this edition of the COBRA Update, we cover how the Dept. of Labor wants to take a look back at COBRA subsidies, COBRA FAQs for employers, and the availability of a new War and Peace-sized COBRA handbook. Leila Morris is Editor of California Broker Magazine.

COBRA FAQs for Employers

The Dept. of Labor offers a handy list of frequently asked questions for employers about COBRA Coverage. The following is a summary in simplified language:

Which employers are required to offer COBRA coverage?

Employers with 20 employees or more are usually required to offer COBRA coverage. They also have to notify employees that coverage is available. COBRA applies to plans that are maintained by private sector employers as well as those sponsored by most state and local governments.

Who is entitled to COBRA benefits?

There are three elements to qualifying for COBRA benefits:
• Plan Coverage – COBRA applies to group health plans. In the previous calendar year, the employer must have had 20 employees or more on more than 50% of typical business days. Full-time and part-time employees are counted. Each part-time employee counts as a fraction of an employee. (The number of hours that the part-time employee worked divided by the hours an employee must work to be considered full-time).
• Qualified Beneficiaries — A qualified beneficiary is someone who was covered by a group health plan on the day before a qualifying event. It can be an employee or their spouse or dependent child. In certain cases, a retired employee qualifies as well as their spouse and dependent children. Agents, independent contractors, and directors who participate in the group health plan may also qualify.
• Qualifying Events — Qualifying events are events that cause a person to lose health coverage. The type of qualifying event is important because it determines who the qualified beneficiaries are and the amount of time that a plan must offer them health coverage under COBRA. However, a plan may choose to provide longer periods of continuation coverage than what is required.

The following are qualifying events for employees:
• The employee quit or was laid off for reasons other than gross misconduct.
• The employee’s hours have been reduced.
The qualifying events for spouses are:
• The employee quit or was laid off for reasons other than gross misconduct.
• The employee’s hours have been reduced.
• The employee has become entitled to Medicare.
• The employee has divorced or become legally separated.
• The employee has died.
The qualifying events for dependent children are the same as for the spouse with one addition:
• The loss of dependent child status under the plan rules.

Which benefits must be covered under COBRA?

Qualified beneficiaries must be offered the same coverage as what they had immediately before qualifying for COBRA. However, a change in plan benefits for active employees will also apply to qualified beneficiaries. Qualified beneficiaries must be allowed to make the same choices given to active employees under the plan, such as choices during open enrollment.

Who pays for COBRA coverage?

Beneficiaries may be required to pay for COBRA coverage. However, the premium cannot exceed 102% of plan costs for similarly situated employees. (A similarly situated employee is an employee who has substantially the same position as what the qualified beneficiary had.) These plan costs include what the employees pay as well as what the employer paid before the qualifying event, plus 2% for administrative costs. Rules also apply for qualified beneficiaries who are getting an 11-month disability extension of coverage. The premium for those additional months may be increased to 150% of the plan’s total cost of coverage.

COBRA premiums may be increased if the plan costs increase. But costs must generally be fixed in advance of each 12-month premium cycle. The plan must allow qualified beneficiaries to pay premiums on a monthly basis if they ask to do so. However, the plan may allow them to make payments at other intervals (weekly or quarterly).

The qualified beneficiary must make the first premium payment within 45 days of signing up for COBRA. Payment is for coverage from the date of COBRA election retroactive to the date of the loss of coverage. Premiums for successive periods of coverage are due on the date stated in the plan. There is a minimum 30-day grace period for payments. A payment is considered to be made on the date that it is sent to the plan. What if the beneficiary does not pay premiums by the first day of the period of coverage? The plan can cancel coverage until it gets the payment and then reinstate coverage retroactively to the beginning of the period of coverage.

What if the payment amount that the beneficiary sends is incorrect, but not significantly less than what’s due? The plan must notify the qualified beneficiary and grant 30 days to pay the difference. The plan is not obligated to send monthly premium notices. Since COBRA beneficiaries are subject to the rules of the plan, they are responsible for all costs related to co-payments and deductibles. They are also subject to catastrophic and other benefit limits.

What is the Federal Government’s role in COBRA?

COBRA continuation coverage laws are administered by several agencies. The Departments of Labor and Treasury have jurisdiction over private-sector health group health plans. The Department of Health and Human Services administers the continuation coverage law as it affects public-sector health plans. For the toll-free COBRA hotline, call 866-444-3272 or visit www.dol.gov/ebsa.

DOL Seeks Comments on COBRA Subsidy Survey

The Dept. of Labor (DOL) will be conducting a survey to determine the effectiveness of the COBRA subsidy provided under the American Recovery and Reinvestment Act (ARRA). The DOL is also seeking public comment on how to conduct the survey. The study will address whether the subsidy may have failed to reach some of the intended recipients or benefited some who did not need the benefits as much. Documenting such unintended consequences may suggest ways that other programs could be targeted more efficiently.

The Dept. of Labor wants a reliable estimate of how may of those who were eligible for ARRA-subsidized COBRA coverage actually enrolled, how many dependents enrolled, and the duration of ARRA-subsidized enrollment. The DOL also wants to know how outcomes would have differed for beneficiaries if the subsidy were not available. The DOL wants to understand what factors drive COBRA enrollment and learn about differences in the experiences between those who were eligible for the subsidy and those who were not.

The DOL is soliciting the following comments from the public on data collection for the study:

a. Whether collecting this information is necessary.
b. The accuracy of the agency’s estimate of the burden of collecting the information including the validity of the methodology and assumptions used.
c. The quality, usefulness, and clarity of the information to be collected.
d. The use of technology to collect the information.

Send comments to Celeste Richie, U.S. Department of Labor, Chief Evaluation Office, Office of the Assistant Secretary for Policy, 200 Constitution Avenue NW., Frances Perkins Bldg., Room S-2316, Washington, DC 20210, telephone number (202) 693-5076 (this is not a toll-free number). Email address is richie.celeste@dol.gov and fax number is (202) 693-5960. Written comments must be received on or before February 10, 2012. To view the Federal Register Announcement, visit http://www.federalregister.gov/articles/2011/12/12/2011-31824/proposed-information-collection-request-icr-for-the-impact-of-the-american-recovery-and-reinvestment#p-5

COBRA Handbook

Vision Insurance: Offering Vision Benefits:
A Great Way To Look Out For Our Aging Workforce

by Patsy J. Akridge

With age comes experience and, oftentimes, opportunity. Think about a typical workforce. Many employees over 40 have worked their way up the corporate ladder and are now in leadership or management positions. Perhaps, over the years, they’ve also gained a bit more wisdom or perspective.

But while a lot of things can get better for employees with age, their health – including their eye health – tends to get worse. This can leave employers wondering how their bottom line will be affected. Did you know about the following statistics?
• One in three employees will experience an eye disease by the time they reach 65 (Galey JP, Roberts J, eds. U.S. Department of Health and Human Services, Public Health Service, National Center for Health Statistics).
• One in four employees, age 45 and older, is taking frequent breaks to rest their eyes at work because they hurt or feel tired (Synovate survey of full-time U.S. employees, on behalf of Transitions Optical, 2011).

These are real issues for employers, considering that the number of Baby Boomers in the workplace alone has increased by more than 30% over the past decade (2010 U.S. Census). And with our economy still in recovery mode, many employees are choosing to stay in the workforce longer. They’re also working more hours and are using computers or PDAs more than ever before. The health and well being of older workers is a topic that we can’t ignore –and by elevating eye health, employers can help to further promote an employee’s total health.

There Is Good News

As an eyeglass wearer myself, I have become extremely conscious of the need for proper eye care for all employees including older employees. While there’s no denying that age can take a serious toll on an employee’s overall health and quality of vision – not to mention productivity – we, as brokers, have the task of helping our clients acknowledge this issue and then embrace the solution. Many vision problems are completely preventable with the right vision care and vision wear. And those that aren’t are still better treated and less costly if caught early. This means that employers should really select a high-quality vision benefit for their employees and make a commitment to educate their employees on all the reasons to take advantage of it.

Think about it: vision benefits are relatively inexpensive, yet arguably have the highest return on investment for employers with average gains up to $7 for every $1 invested (Vision Care: Focusing on the Workplace Benefit, The Vision Council, Fall 2008). Plus, employees want vision coverage. In fact, almost all workers (94 %) believe that their vision benefits will become even more important to them as they age (Synovate survey of full-time U.S. employees, on behalf of Transitions Optical, 2011).

By encouraging your clients to take advantage of a premium vision plan, you can help them lower their healthcare costs, while improving the overall health, productivity and satisfaction of their aging workforce.

Vision After 40: What Your Clients Need To Know

Some people may feel like they’re over the hill once they turn 40 while others may feel empowered, or may not feel any different at all. But when it comes to eye health, 40 does seem to be a magical number. It’s the age when many employees may begin experiencing changes in their vision, such as trouble seeing up-close. With even more years under our belt, we may begin experiencing vision problems that increase with age, such as eyestrain and fatigue and worse color recognition. We may even start developing early signs of serious eye diseases. Ignoring signs or putting off eye care can lead to a number of problems for employers – from decreased productivity to increased healthcare costs. Much of these burdens can be avoided through regular vision care and vision wear through a comprehensive vision plan.

Eye Exams

When most people go to the eye doctor, they think about how well they can see. Has their vision changed? Will they need new glasses or a new prescription? It’s hard to contemplate receiving bad news. But the reality is that our risk for eye diseases, such as cataract and macular degeneration will only increase as we age.

Consider that aging Baby Boomers will double the current number of blind or visually impaired Americans by the year 2040 (National Eye Institute). This number can be scary for employers, especially considering that the total annual cost of eye diseases among adults over the age of 40 is approximately $35 billion per year (The Economic Burden of Major Adult Vision Disorders in the United States, 2007). An eye exam provides early detection of eye disease, so it can be prevented or at least tempered.

Think about glaucoma. The most common type develops gradually and without symptoms, slowly decreasing peripheral vision. Unfortunately, only half of people with glaucoma are aware they have it (Prevent Blindness America). And once vision is lost, you can’t get it back.

During an eye exam, the eye doctor can sometimes detect signs of serious overall health issues like diabetes and hypertension. This further elevates the role of the vision benefit since it can serve as a check on an employee’s overall health, as well as eye health. If diseases like diabetes can be caught and treated early, we can expect a better health outcome and lower overall medical costs. This is just one more reason the vision benefit is important for aging workers who are more likely to face these overall health issues.

Vision Wear

You may have heard that even slightly miscorrected vision can lead to a 20% decrease in employee productivity (Daum, K., Optometry 2004). While this problem can usually be resolved easily through an up-to-date eyeglass prescription, research indicates that many older employees aren’t taking the right steps to see their best. In fact, 34% of those 40 and older say they have trouble seeing up-close, even while wearing eyewear (Centers for Disease Control and Prevention, Behavioral Risk Factor Surveillance System survey). Their prescriptions may be out of date or there could be another problem interfering with their vision. This reinforces the importance of educating employees about getting their vision checked regularly even if they think they’re seeing just fine!

Additionally, many employees aren’t seeing well because of problems with sensitivity to light or glare, which is more common with age. More than eight out of 10 Americans 45 and older say glare affects their vision outdoors and 20% of those 55 and older report trouble seeing while driving at night (Transitions Optical Global Healthy Sight Survey, 2009). The right eyewear can help, which is one reason I recommend lenses, such as Transitions, that are clear indoors and darken in sunlight to provide the right amount of tint in changing lighting conditions. They automatically reduce glare, which can lead to headaches, eyestrain, and fatigue. These lenses also block harmful UV rays, which can contribute to eye disease like cataract and macular degeneration. Anti-reflective coatings can reduce extraneous glare and reflections while driving at night, helping you see better and drive safer.

Finally, it’s important to mention that today’s older employees are staying more active. Research has shown a significant increase in the number of Baby Boomers reporting sports-related injuries over the past three years – reinforcing the importance of vision plans that cover impact-protection eyewear (National Sporting Goods Association).

By offering premium vision plans that cover higher-performing lens options, you’ll be helping employers give their older employees what they want and need. Employees over 45 are more interested in a vision plan that includes discounts on or coverage of premium lens options with nearly nine out of 10 wanting these options (Synovate survey of full-time U.S. employees, on behalf of Transitions Optical, 2011). These types of value-adds go a long way in helping to increase employee satisfaction.

The Decision Is Theirs, But the Choice to Educate Is Yours

Even though employees recognize the value of vision coverage, one in four will not enroll in the company’s vision plan. And while the overall benefits are arguably greater for Boomer-generation employees, those between the ages of 45 and 64 are only slightly more likely than younger employees to enroll in their company’s vision plan (Synovate survey of full-time U.S. employees, on behalf of Transitions Optical, 2011). You can help close this gap and increase enrollment by educating employers on the true value of vision coverage and providing them with the tools to educate their workforce.

If your clients have a large portion of employees over 40, chances are that they’ll be more receptive to this type of education. But as a vision benefit broker, I know that it can be challenging to find time to talk about this during a standard sales call or meeting. I’ve put together a few tips to help you make vision care more of a priority for employers with an aging workforce.

Do Your Homework

Take the time to learn about your client’s workforce before you make the call. Understand the age breakdown of their workforce to see if it makes sense to focus your attention on vision benefits for older employees. No matter what you find out, be sure to tailor your messaging. For example, if their workforce is comprised mainly of ethnic minorities, consider talking about the eye health issues more common among these groups. When it comes down to it, vision coverage is important for everyone, but there are different ways to talk about it.

Pull Out Your Toolbox

Many vision plans, organizations, and optical companies offer complimentary eye health education resources that you can share with employers, who can, in turn, share with their employees. For example, to determine eye health risks and cost avoidance possible for a specific workforce, you or your HR clients can plug their data into Transitions Optical’s Healthy Sight Calculator (HealthySightWorkingForYou.org/Calculator). Employers can also share an individual version of the calculator with their employees to get them thinking about their vision (HealthySightCalculator.org).

Reinforce Education

Once your clients are on board with a premium vision plan, reinforce the importance of educating their workforce during the enrollment period and year-round to encourage utilization. Remember that, just because employees enroll, doesn’t mean they will use their benefits in the best possible way or at all. This type of education offers a great way for employers to show their employees they care and for you to show your clients that you care.

Follow Up

Never assume that your work is done once you’ve sold a premium vision plan. To keep clients coming back year-after-year, it’s important to follow up regularly. Be sure to ask how things are going and offer to provide additional resources or suggestions to help them increase vision plan utilization.

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Patsy J. Akridge is the president of Akridge Insurance & Financial Services of Martinsville, Va. and vice president of Akridge & Jones Advisory Group t/a AJAG of Richmond, Va. With 28 years of experience in the insurance and financial industry, she does national marketing and sales for mid- to large-sized employers. Akridge takes pride in the success of both of her companies as innovative leaders in the marketplace, having strategic relationships with IMG World and Rutherfoord. She was honored in 2011 as the 2010 Transitions Optical Vision Benefits Broker of the Year and recently has experienced success promoting Transitions lenses as an entryway into the collegiate sports arena.

Vision Insurance:
Comprehensive Vision Exams Play Important Role in a Child’s Development and LearningVision Benefits Have Been Expanded for Children

by Dr. John Lahr, OD, FAAO

From the day they’re born, children’s eyesight plays an important role in their development and learning. During infancy, children rely on their vision to recognize familiar faces, crawl, judge distances, and grasp and throw objects.

Preschoolers depend on their vision to learn hand-eye coordination, fine motor skills, and visual perception – abilities they’ll need to get a head start for school and throughout their life. School-aged children use their vision constantly to learn everything from algebra to zoology.

In fact, it’s been estimated that as much as 80% of a child’s learning is visual, according to the American Optometric Association. Undetected vision problems in children can lead to learning disabilities, difficulty reading, an inability to see the board in front of the class, eyestrain and headaches, all of which can affect their ability to stay focused. These vision-based challenges can lead to poor academic performance, low self-esteem and negative behavior.

Eye and vision disorders in children from infants to age 17 are widespread, according to the American Optometric Association (AOA). Research indicates that early detection and intervention are particularly important in children because of the rapid development of the visual system in early childhood and its sensitivity to interference.

It’s vital that parents schedule comprehensive eye exams for their children because early detection and treatment provide the very best opportunity to correct vision problems and maintain eye health.

Some Vision Disorders Are More Common In Children

Children can suffer from many of the same vision conditions as adults, including nearsightedness, farsightedness, and astigmatism, but certain vision disorders are more common in children. Vision disorders more common in children include crossed eyes, lazy eye and retinopathy of prematurity, a condition affecting premature babies that can lead to blindness. Other eye conditions in children include malignant tumors (retinoblastoma), infantile cataracts, and congenital glaucoma.

In addition, some children with learning difficulties exhibit specific behaviors of hyperactivity and distractibility. These children are often labeled as having attention deficit hyperactivity disorder (ADHD). However, undetected and untreated vision problems can elicit some of the very same signs and symptoms commonly attributed to ADHD. Because of these similarities, some children may be mislabeled as having ADHD when they may actually have an undetected vision problem.

Children Are An Underserved Demographic

There’s strong evidence that children are underserved when it comes to eye care. Consider the following statistics from Prevent Blindness America and the Vision Council:
• 25% of school-aged children are affected by vision problems.
• 80% of children who have been diagnosed with learning disabilities have vision problems that typically are undiagnosed.
• Two-thirds of children under age six have never received an eye exam.

The issue of children being underserved can’t be blamed entirely on a lack of vision benefit coverage. While two-thirds of parents use their vision benefits for themselves, only half take their children to see an eye care professional, even though the children are covered under their vision plan.

One of the reasons parents might not prioritize their children’s vision needs is because they assume their child’s vision is fine unless their child has a specific vision complaint. Unfortunately, children don’t always alert a parent when there’s a problem and if their vision is changing gradually, they might not even be aware their vision is poor.

Vision Screenings Are No Substitute For Comprehensive Exams

Another reason why parents might not schedule a comprehensive eye exam for their child is because of the misconception that vision screenings conducted at school or a pediatrician’s office are substitutes for a comprehensive eye exam.

Many parents believe, incorrectly, that if their child passes a school screening, they have healthy vision. Unfortunately, this might not be the case because vision screening doesn’t test for many of the conditions that might be uncovered by a comprehensive eye exam, and is a poor indicator of overall eye health.

Vision screenings typically only test for distance visual acuity. While being able to see clearly at a distance is important, it doesn’t provide an indication of how well the eyes focus up close or how well the eyes work together. Some screenings may also include a plus lens test for farsightedness and a test of eye coordination. However, even these additional screening tests fail to detect many vision problems. In some cases, vision screening can give parents a false sense of security for those children who pass the screening but actually have a vision problem, thereby delaying further examination and treatment.

Vision Exam Guidelines

According to the AOA, infants (birth to 24 months) should have their first comprehensive vision exam by six months of age. If no vision correction is required, children should have another eye exam by age three, and then again at age five, prior to entering the first grade. Children age 6 to 18 years should have a comprehensive eye exam every two years.

Infants and children who are at higher risk for certain eye conditions or wear corrective lenses should follow their optometrist’s or ophthalmologist’s eye exam recommendations. These children might require annual or more frequent eye exams for closer observation.

Vision Benefits Organization Expands Child Vision Benefits

Because their bodies are still growing, children who are developing nearsightedness, farsightedness, astigmatism or other eye condition, might experience a rapid change in prescription and resulting vision impairment.

Most vision plans include child benefits that cover one eye exam and one pair of corrective lenses every 12 months, but some children might need more frequent eye exams to monitor vision conditions or get new prescriptions to correct vision impairments during their growth years. For these children, a visit to an eye care professional once a year isn’t enough.

That’s why at least one leading vision benefits organization introduced a plan design that extends a second eye exam and second set of corrective lenses each year to children 18 years of age and younger, based on need. The benefit includes protective polycarbonate lenses, photochromic lenses and contact lens professional services (fit and follow-up).

Providing a Good Head Start

From the crib to the classroom, vision plays a vital role in early learning and development. Children have a higher risk for certain eye conditions and the best way to detect these and other vision problems is through regular comprehensive eye examinations beginning early in life.

By taking steps to ensure that their child’s vision is developing normally, parents can provide their children with a head start for learning and help them establish good vision practices that can last a lifetime.

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John Lahr, OD, FAAO, vice president of Provider Relations and Medical Director for EyeMed Vision Care, has over 28 years of clinical practice and has held various leadership roles in the American Optometric Association.

Welcome to our annual HSA Survey. We asked the top companies in the state essential questions about coverage and services that affect you, the broker. Read on to find out what plans will work best for you and your clients. Look For Part II of Our Annual HSA Survey in the February 2012 Edition

1. What are the primary services you offer as part of your HSA product?

Anthem Blue Cross: We offer Medical HSA Health Plans and an option to in an integrated Banking system through our contracted partners; NY/Mellon.

Blue Shield: Blue Shield offers an integrated eligibility and claims experience for clients that choose an Account Based Health Plan (i.e., Health Plans wrapped with an HSA, HRA or FSA account). 2012 will be a year of choice. Members can choose a HDHP PPO and couple it with a Health Savings Account or choose a regular PPO or HMO plan and wrap a Health Reimbursement Account around the product. In either case the member will be empowered to manage their health and wealth.

HSA Bank: Employers benefit from a team of experts focused on designing their company’s HSA program, enrollment meeting participation, and ongoing business support. Knowledgeable, prompt, and friendly customer service is an integral component of our HSA product for the broker, employer and accountholder.
Accountholders also have access to convenient Internet banking and plenty of self-directed investment choices. A unique service that we provide for all accountholders is penny funding. HSA Bank funds each new HSA on the day it’s opened with a penny to meet IRS “establishment”. This is very important because if the account is not open and someone has a claim it cannot be paid with HSA funds. With penny funding, accountholders can be reimbursed for eligible medical expenses that occur the day their account is opened. Please refer to hsabank.com for a list of all HSA services offered at no charge to accountholders.

HSA California: The HSA California Exchange is the only small-group, fully integrated HSA program with multiple carriers. Each employee can choose from a menu of HSA-qualified high deductible health plan benefits from Health Net, Kaiser Permanente, and Western Health Advantage with no minimum participation requirements.
HSA banking and savings programs are offered through The Bancorp Bank, with accounts FDIC insured to at least $250,000. Accounts include a free debit card, access to hundreds of investment options, personalized checks, and 24/7 online online banking access. There is no application or fee to open an HSA with The Bancorp Bank.
HSA California also offers Dental, Vision, Hearing, HR Support, Life, and Section 125 POP plans, as well as prescription discounts of up to 75% through the California Rx Card Program, and amusement park, movie ticket, and other discounts through the Cal Perks Employee Discount Program (offered at no cost to enrolling groups).

Sterling HSA: Sterling offers education, implementation and account management services through personal sales and service teams, as well as online for brokers, employers and accountholders. Among our primary services are HSA education, enrollment assistance, a review of the EOB, bill paying, record keeping, scanning and archiving of bills, receipts, and other critical information in case of an IRS audit. We also offer options for self-directing investments and flagging expenses submitted as qualified and non-qualified for HSA distribution. Our online services include online enrollment, banking, account transaction information, and the ability to make changes to the HSA account. Our most recent satisfaction survey found that among the Sterling services valued most by our HSA accountholders, online services are at the top of the list with 91% of Sterling accountholders responding favorably.

We offer educational materials and services in English and Spanish. Our trans-created Spanish website includes HSA online enrollment for individuals and employer groups. Our forms and collateral have also been trans-created for clients who prefer Spanish and we have many Spanish bi-lingual customer service representatives to help them.

UnitedHealth Group: UnitedHealthcare is the largest provider of consumer-driven health plans in the country with nearly 3 million members enrolled in consumer-driven health plans that incorporate a health savings account or health reimbursement. Additionally, UnitedHealth Group uses its own financial corporation, OptumHealthBank, for its HSA program administration. OptumHealthBank, an FDIC-insured financial institution focused solely on health care banking, is the nation’s largest HSA administrator. Account holders receive market competitive interest rates on their deposits, online bill payment options, and direct debit card access to their accounts. Additionally, once they get a qualifying account balance, they also can invest in a range of highly regarded no-fee, non-proprietary investment options.

2. Do you offer an HSA-qualifying high deductible health insurance plan?

Kaiser Permanente: Yes, Kaiser Permanente offers an array of HSA-Qualified Deductible HMO plans for the Individual, Family and Employer group markets, PPO plans for Small and large business groups, EPO plans for Individuals and Self Funded EPO plans.

SeeChange Health: Yes. To the best of our knowledge we offered the nation’s first value-based benefit HSA-compatible plans in the country.

Sterling HSA: As an independent HSA administrator, Sterling can work with all HSA compatible plans — fully insured and self-insured. In mid-2011, we launched Sterling level funding and traditional self-insurance products that do include HSA-qualifying high deductible health plans as an employer option.

3. Are you providing a health spending arrangement or a savings vehicle?

Aetna: Yes.

Anthem Blue Cross: We have partnered with BNY/Mellon and their support staff – ASC/Mellon to provide banking and investment options for the financial piece of our HSAs. Our integration allows members to login to www.Anthem.com/.ca and be linked to their BNY/Mellon account.

Blue Shield: Blue Shield offers choice. Our clients and members can choose to have an integrated HSA model or a stand-alone HSA bank account. Both options promote pre-tax deposits and after-tax deposits; when the member reaches a certain dollar amount, he/she can choose to invest the savings in mutual funds.

HealthEquity: Both. Whether account holders use their HSA as a spending arrangement or a savings vehicle really depends on the consumer.

HSA California: HSA California and The Bancorp Bank have partnered to create a seamless, online approach for employers and employees to fund an HSA with a wide array of savings and investment options.

Kaiser Permanente: Members who enroll in one of our HSA-Qualified Deductible HMO plans can open a health savings account through our preferred financial administrator, Wells Fargo. However, members are also free to open a health savings account with a financial institution of their choice. Our HSA-Qualified Deductible HMO plans are designed to work with HSA administration from any financial institution. In terms of other spending arrangements, Kaiser Permanente also offers different deductible HMO plans paired with Health Reimbursement Arrangements (HRA).

SeeChange Health: No. Members have the flexibility to use the HSA administrator which delivers the most value. We have preferred relationships with leading HSA providers for the benefit of our clients.

4. What size employee group is the HSA available for?

Aetna: All sizes of groups.

Anthem Blue Cross: All employee groups are eligible.

Blue Shield: We offer qualified HDHP to be used with an HSA for all markets, including individual and family, small groups (from 2 to 50 employees), midsize groups (51 to 299 employees), and large groups (300+ employees).

Cigna: Our HSA product is available for employers with 50 or more eligible employees.

HealthEquity: Any size. There is no minimum participation requirement for employer groups to offer HSA services with HealthEquity.

HSA Bank: An HSA program is a great choice for any size group. From a small start-up business to a Fortune 500 company, we have the solution for your client.

HSA California: HSA California is available for employers with 2-50 employees.

Kaiser Permanente: Kaiser Permanente offers HSA-Qualified Deductible HMO plans to any group size. PPO plans are available to any group size, and Self Funded EPO plans are available to groups with 500 subscribers.

Sterling HSA: We work with groups of all sizes, including large, medium and small companies. We also work with individuals, many of whom sign up for our HSA online.

5. Is your management team experienced in health insurance, financial services, or both?

Aetna: Health insurance.

Anthem Blue Cross: Anthem has subject matter experts in health Insurance and the financial services for our HSAs plans. These associates can work with the client and agent/broker to explain all processes.

Blue Shield: Blue Shield’s management team is experienced in health-care services, but works closely with our preferred vendors—Health Equity, which provides the integrated model; and Wells Fargo, for stand-alone accounts.

HealthEquity: HealthEquity’s management team has both health insurance and financial services experience, and our founder and CEO is a board-certified general surgeon.

HSA Bank: Our entire team of HSA experts, especially our regional vice presidents located nationwide, is highly experienced in both the health insurance and financial services.

SeeChange Health: Our leadership has extensive experience in health insurance and financial services as well as with value-based benefit plan designs. Our team works closely with brokers and clients to ensure a smooth and successful enrollment and long-term relationship with SeeChange Health.

Sterling HSA: Sterling HSA’s executive team has extensive experience in healthcare, insurance, and consumer directed account management. We have complemented those skills with staff and advisory board members who have experience in financial services to optimize support of our clients during enrollment and to manage their accounts with us long-term.

Cigna: Cigna provides consumerism education on products including the HSA to brokers via forums and through highly skilled sales managers.

HealthEquity: Yes. HealthEquity offers a number of HSA continuing education courses on a nationwide basis. We also provide broker education through online tools, webinars, and other live training events.

HSA Bank: Yes! And, we love to. Your regional vice president, David Drzymkowski, is happy to visit your office and host a Lunch and Learn on the basics of an HSA or how to increase adoption at enrollment meetings. Or, if you have brokers spread out in various cities – ask us for a Webinar.

HSA California: Yes. HSA California has dedicated HSA experts ready to provide personalized training and HSA education to brokers. We can be reached between 8 a.m. and 5 p.m., Pacific Time, Monday-Friday at sales@hsacalifornia.com or toll-free at (866) 251-4625. HSA California also provides ongoing seminars to provide brokers with the necessary information and tools to explain High Deductible Health Plans and HSAs to clients.

Kaiser Permanente: Yes. We provide training to our brokers. In addition, our preferred financial administrator for HSAs, Wells Fargo, has a dedicated support line to assist our brokers with questions. Wells Fargo also has an online flash educational presentation for our customers about HSAs online at:wellsfargo.com/investing/hsa/demo

SeeChange Health: Yes. We provide extensive training on all of our value-based benefit products, including HSA-compatible plans. We also work with the state’s major general agencies to help educate brokers. Our training options include individual sessions, group “lunch and learns,” webinars and CE courses.

7. What commissions are paid to brokers and when?

Blue Shield: Blue Shield does not pay commissions for HSAs because we administer the HDHP.

Cigna: Cigna pays its standard commissions for HSA sales.

HSA Bank: We recognize the important role you play in our success. To show our appreciation, we created a producer recognition program that rewards brokers on three levels beginning at ten HSAs. For more info, visit hsabank.com.

HSA California: HSA California pays standard commissions monthly.

Kaiser Permanente: Brokers are paid the standard medical commissions for all of our HSA-qualified health plans.

SeeChange Health: We pay 7% level commissions for groups of 2-to-50 employees and 5% level for groups of 51 or more employees.

Sterling HSA: Commissions for our HSA business are 10% of the fees for all new and renewing groups and are paid quarterly. We also pay commissions on HRA, FSA, and POP business.

Blue Shield: Enrolling online eliminates the need to complete and mail in paper enrollment forms, provides an efficient enrollment process that is accurate and secure, and delivers immediate enrollment confirmation to employees.
During the Blue Shield group installation for our integrated program, the client will be seamlessly set up with HealthEquity. Blue Shield will pass employee eligibility information to HealthEquity, which will automatically set up bank accounts. The client will be able to fund its employees’ HSA through payroll deduction.

Employees enrolling in a Wells Fargo Health Savings Account (HSA) through their employer are able to conveniently enroll online directly with Wells Fargo.

Cigna: Cigna provides an online and paper version of the HSA bank enrollment application. Employers can provide online or paper enrollment options for their employees.

HealthEquity: Yes. Once the member has enrolled in a qualified plan, they can sign up for their HSA directly from the HealthEquity website (www.healthequity.com). Members can enroll through the online enrollment process or by downloading the enrollment form and submitting it to HealthEquity.

HSA Bank: We do. Auto enrollment provides an efficient, quick way to open the accounts automatically—no paperwork, no separate process required, no signature.

HSA California: PDF enrollment forms are available on our Website at www.hsacalifornia.com. Employers and employees can open and fund an HSA on our Website through a simple process driven by our partner, The Bancorp Bank. Employers can even maintain employees’ membership information online.

Kaiser Permanente: Individuals and Families can apply for Kaiser Permanente health plans online by logging on to: kaiser.healthinsurance-asp.com/expressweb/user/Welcome.action Wells Fargo: HSA Employer and Individual applications can be downloaded at wellsfargo.com/hsa.
Kaiser Permanente health plan enrollees from companies whose employer is not sponsoring an HSA, and individuals enrolled in Kaiser Permanente’s Individual and Families health plans, can open and fund an HSA account online at: wellsfargo.com/investing/hsa/enroll.

SeeChange Health: We will add this functionality in 2012.

Sterling HSA: Yes. We provide online enrollment for individuals who are part of employer groups, individuals seeking an HSA administrator on their own, and for employer groups to manage the HSA enrollment of employees. Sterling account enrollment and management forms are also available on our website at www.sterlinghsa.com in a fill-able PDF format to download, complete, and email or mail to Sterling. Our online enrollment and paper forms are available in English and Spanish.

9. How do you assist account holders with paying medical bills?

Aetna: We provide cost estimator and quality assessment tools.

Anthem Blue Cross: High Deductible Health Plans engage the members to be knowledgeable about their healthcare treatment and management of funds.
Members manage their own bank accounts, pay for their medical and Rx needs with their HSA account. Members can view online their banking balances and their claim activity.
Account status and explanation of benefits documents are available through our Website.
Members can use their debit card or Mellon checks to pay for their out-of-pocket responsibility. The customer service advocates are available to help members understand their financial responsibility.

Blue Shield: With our new Account Based platform with Health Equity, there are just five simple steps from visit to reimbursement:

• Member visit to healthcare provider
• Claims sent to HealthEquity by Blue Shield
• Automatic notification of responsibility
• Claim and account information on the same screen
• Provider paid directly or reimbursement from CDH account

When employees are notified of a claim with member responsibility, they just access the website to process payment and reimbursement. After viewing the claim detail, members can choose the action to be taken: pay provider, reimburse themselves, or close expense. The medical expense payment process is easy and flexible. Members can directly pay a provider from their HSA pre-tax account or add an additional external bank account; both pre- and post-tax distributions are tracked and housed on the member portal for tax reporting purposes.

Cigna: Cigna helps account holders manage their healthcare expenses with information decision support tools and ready access to HSA funds. Cigna provides cost and quality information according to the individual’s plan for more than 200 procedures performed by specialists, in hospitals and in outpatient facilities. The pharmacy price quote tool compares actual real time out-of-pocket costs for brand name, generic and over the counter medications at 57,000 pharmacies nationwide.

HealthEquity: HealthEquity provides a debit card to account holders so they can pay for eligible expenses directly at the point of service. Alternatively, members may choose to wait for the insurance claim to process before paying for the expense. Once the claim is processed, it appears on the HealthEquity Member Portal where the account holder can login and determine how to pay the claim. If the account holder wishes to pay the provider with their HSA funds, HealthEquity will mail a check directly to the provider.

HSA California: Our carrier partners – Kaiser Permanente, Health Net, and Western Health Advantage – have created special units within their organizations to help members enroll in HSA California.

Kaiser Permanente: Money in the HSA can be used to pay for a variety of qualified medical expenses ranging from routine physicals to prescription drugs. To pay for expenses, the member can simply present their HSA debit card to the provider, and money will be deducted directly from their HSA. However, if the member wants to pay for services out of pocket and submit an HSA reimbursement claim manually, they can. Kaiser Permanente’s Member Service Unit can support our members with any medical bill question or concern. A member can also write their HSA debit card number on their Kaiser Permanente bill and remit for payment.

SeeChange Health: We help our members understand their share of medical treatment and how they can offset those costs by completing Health Actions designed to help them manage their health. Expenditures from their HSA are handled directly between the member and their account administrator.

Sterling HSA: Sterling reviews the EOB and medical bills for health plan discounts to insure that our accountholders do not spend more for a healthcare service or product than the insurance company would pay. We also alert accountholders when we spot disbursements that do not appear to comply with IRS rules. A number of our clients come to us for help with payment plans in the event there are insufficient funds to pay a medical bill. This service is especially valuable in this difficult economy. We also partner with Medical Cost Advocate to help our accountholders negotiate medical costs before and after they are incurred.

10. How does the administrator help the accountholder with insurance-related questions?

Aetna: Customer service representatives are available by phone and through our website.

Cigna: Cigna offers integrated customer service via our myCigna.com website and 24/7/365 toll-free telephone service to respond to questions about the member’s health insurance and the HSA.

Anthem Blue Cross: Anthem provides online resources as well as a customer service support line for all members. Support numbers are listed on the member’s health insurance card.

Blue Shield: All HDHP-related questions are referred back to Blue Shield.

HealthEquity: Should the member call HealthEquity, our support specialists will be able to help the account holder understand basic health plan information such as: eligibility, claims for reimbursement, co-pays, deductibles, and co-insurance information. HealthEquity can facilitate “warm transfers” to the health plan for detailed issues involving claims, coverage, or other health plan-specific information.

HSA California: Both HSA California and The Bancorp Bank have customer support teams with expert knowledge available by phone or e-mail from 8 a.m. to 5 p.m., Eastern Time, Monday-Friday. (866) 271-2649 or HSAInvestments@TheBancorp.com.

Kaiser Permanente: Our preferred financial administrator for HSAs, Wells Fargo, refers insurance-related calls back to Kaiser Permanente (KP). KP member service representatives are trained to answer any insurance related questions our members may have. At kp.org, we also have a website for deductible plan members to educate themselves about what to expect pre/during/post visits with our providers, including decision support tools (e.g., preventive services list, sample fee list, interactive treatment fee tool) that may facilitate better understanding of their insurance coverage and optimize the wide range of health-related services offered by KP. Visit kp.org/deductibleplans to find out more.

SeeChange Health: Account administrators refer plan coverage questions to SeeChange Health. Our Customer Service representatives are available by email or phone from 5am-8:30pm. Additionally, members can access helpful information and tools through MySeeChangeHealth.com.

Sterling HSA: Our customer service representatives are available Monday – Friday from 7 am to 6 pm Pacific. Clients and brokers can reach us toll-free at 800-617-4729 and via e-mail at customer.service@sterlinghsa.com.

UnitedHealth Group: UnitedHealthcare’s Customer Care Professionals are available by phone to respond to all insurance and account-related questions; a number of resources, including calculators and FAQs are also available online at www.myuhc.com.

Blue Shield: Blue Shield offers a fully integrated experience through
our partnership with Health Equity. Our new Account Based platform offers a completely integrated healthcare experience for both members and clients. All accounts are on one platform with integrated enrollment and claims information, and flexible contribution models. We will also provide clients with an Employer Portal with access in real time to eligibility information, contributions, fee payments, and more. Clients will also be able to run reports for easy reconciliation.

Cigna: Yes, the HSA is fully integrated with the high deductible health plan.

HealthEquity: HealthEquity’s integration capabilities differentiate us in the HSA marketplace. In addition to integrating with health plans, we currently support single sign-on methodology with 21 different partners.

HSA Bank: No. This makes it hassle-free when a broker moves a group from one carrier to another. Why? They can keep the account with HSA Bank.

HSA California: HSA California is completely integrated with The Bancorp Bank. Eligibility is automatically transferred to The Bancorp Bank, so that account set-up is simplified; employers can set up employee HSAs, fund employee HSAs, and complete other administrative capabilities – all online.

SeeChange Health: No as members are free to select any HSA administrator they choose.

Sterling HSA: We are an independent administrator available to work with all health plans across the nation. We have the ability to pull EOB information from the carrier for payment on behalf of our accountholders.

UnitedHealth Group: Yes, in 2002, UnitedHealth Group chartered OptumHealthBank to help advance the growing convergence of healthcare and financial services and to give consumers a more integrated experience.

12. Are investment choices limited by the administrator?

Anthem Blue Cross: There are over 20 investment opportunities Through BNY/Mellon’s subsidiary Dreyfus.

Blue Shield: Under the Health Equity program, employees can invest their HSA dollars directly from the website after reaching the $2,000 minimum balance; investments are on the same, single platform. There are no fees to invest and members can access up to 12 different mutual funds and each fund prospectus. Tax statements are also available on the website. Wells Fargo has 13 mutual fund options available for investment options.

HealthEquity: HealthEquity has selected a standard investment slate of 49 funds across 15 investment categories from which enrollees can choose to invest.

HealthEquity provides a completely integrated investment experience at no additional cost to the member. The Member Portal is an integrated platform with the investments, so employees do not have to log out and log back in to a separate site. Both the cash position and the invested position are reported on the account holder’s same monthly statement. HealthEquity offers a user-friendly investment desktop where employees can review their target and actual holdings. Account holders are allowed to set their target mutual funds directly from the HealthEquity Member Portal.

HSA Bank: No. All investment options are self-directed by the account-holder. There’s no minimum HSA balance to begin investing. And, there’s no default investment based on account balance.

HSA California: The Bancorp Bank offers an extensive investment portfolio, from FDIC-insured savings accounts to more than 7,000 investment options.

SeeChange Health: That will vary based on the HSA administrator chosen by the member.

Sterling HSA: Not at all. Our accountholders can choose any IRS qualified investment for their HSA funds, including stocks, bonds, mutual funds, and CDs. We made arrangements with Partnervest Securities LLC to offer investment services at a discounted fee for Sterling accountholders. Partnervest also provides Sterling with monthly account balance information to ensure the outside investment information contained in Sterling HSA account records is current. Partnervest contact information is available on our website at http://www.sterlinghsa.com/products/hsa/investment_services/

Anthem Blue Cross: An HSA Addendum and Agreement need to be completed. The HSA Addendum captures how the Employer wants to fund their employees’ accounts. The HSA Addendum is stating you will or will not use our integrated banking option. HSA Agreement must be signed if the Employer chooses our inegrated partner BNY/Mellon.

Blue Shield: There are no extra forms needed; all questions are included in your Blue Shield group installation paperwork.

Cigna: Cigna’s standard processes and forms are used for all Cigna products including the HSA.

HealthEquity: No forms are required. Employers as well as employees
have the ability to set up their accounts online or, if they prefer, download and complete a paper application. Some of our carrier partners offer integrated enrollment, making the setup process even easier.

HSA California: Standard application forms are needed to submit an HSA California case. These forms are available at www.hsacalifornia.com.

Kaiser Permanente: We require our standard application and enrollment process plus necessary forms to set up the Wells Fargo HSA. Wells Fargo: A broker must complete the “HSA Broker Supplement – Application for Services” form and an “HSA Employer Application”. You can find copies of the applications at wellsfargo.com/hsa

SeeChange Health: No special forms are required when applying for an HSA-compatible plan.

Sterling HSA: It’s very simple. Just a completed employer group application (for groups) and an individual accountholder application for each accountholder, along with a list bill and employer preferred form of contribution. Online enrollment and forms are available at www.sterlinghsa.com.

UnitedHealth Group: Employers contributing to the HSA account are required to complete an employer discovery document.

Cigna: JP Morgan Chase has been the trustee for our Cigna Choice Fund HSA product since January 1, 2005.

HealthEquity: HealthEquity is the HSA trustee and has been administering HSA services this way since 2005.

HSA California: Yes. The Bancorp Bank handles HSAs directly; HSA California’s relationship with Bancorp dates back to the start of HSA California, but the bank has been offering services to customers since 2000. The HDHP insurance plans are fully insured products from Health Net, Kaiser Permanente, and Western Health Advantage.

Kaiser Permanente: We first began selling HSA-Qualified Deductible HMO plans with an optional HSA through Wells Fargo in our Colorado, Georgia and Northwest regions in 2005, Mid-Atlantic States in 2006, and California and Ohio in 2007.

SeeChange Health: Members are free to choose their own HSA administrators and, consequently, their own trustees.

Sterling HSA: Sterling does not use a trustee. BNY Mellon Corporation is the custodian of assets of accountholders of health savings accounts administered by Sterling Health Services Inc. and is investment manager of assets in accordance with the Sterling Health Services Inc. Administrative Services Agreement.

Defined Contribution–Defining the Future of Defined Contribution

by Ron Goldstein

As the marketplace prepares for the changes that will accompany full implementation of the Patient Protection and Affordable Care Act over the next two years, more and more employers are beginning to seriously consider defined contribution as key to their healthcare benefit strategy. They know that such an approach can bring affordability and cost predictability to themselves while offering choice and flexibility to their employees.

Defined contribution health benefits have existed as cafeteria plans since the 1980s, but the concept, as we know it today, really has its origins in the 1990s as employers looked for a way to control escalating healthcare costs. Until that point, most employer-sponsored healthcare programs were of the defined benefit variety wherein an employer picked a single health insurer for the entire workforce. With it, the employer also selected the specific benefits that would be covered and what the employee’s financial share would be (larger companies sometimes offered a limited choice of plans, but small to mid-size companies usually offered just one). As healthcare costs continued to rise, many employers simply passed these rising costs onto employees in the form of higher premiums, co-payments and deductibles.

Soon, however, both employer and employee found themselves at a breaking point – indemnity coverage simply became too expensive for most and the rigidity of managed care plans made it impractical for employers to find one plan and one benefit package that worked ideally for everyone. The needs of a single 24-year-old are quite different from that of a young couple starting a family or a middle-age empty nester approaching retirement age. In this environment of shared frustration by both employer and employee, defined contribution began to emerge as a pathway to both affordability and choice.

In a defined contribution plan, an employer pays a percentage toward healthcare coverage for each employee and then provides those employees with multiple health plans from which to choose. The deductible, co-payment amount, plan style, premium and coverage may vary widely between the numerous plans offered; and it is up to the employee to decide which plan best suits their needs. If the employee chooses a plan that costs more than their employer’s contribution, the employee pays the difference. (Our experience over the past 15 years shows that 64% of participants buy up to a richer plan or more dependent coverage, indicating that consumers are willing to pay for their healthcare if they have a choice and can control where their dollars go.)

Defined contribution health plans (or “consumer driven” or “self-directed” as they are sometimes called) allow employees to be more involved in their healthcare choices and helps them more fully understand and appreciate the true cost of healthcare. At the same time, they help employers set a financial framework for their healthcare costs and allow employers who might not otherwise be able to afford to offer coverage a pathway to providing this important benefit for their workforce.

In addition to the advantages that have always accompanied a defined contribution plan, there is growing interest in this strategy in the wake of healthcare reform. And that makes it more important than ever for insurance brokers to understand defined contribution as it pertains to health insurance offerings, health insurance exchanges, and the Patient Protection and Affordable Care Act (PPACA).

The PPACA mandates that every state establish and launch its own health insurance exchange by January 1, 2014, or default to a national fallback program. These exchanges will create an online, one-stop shopping mall where consumers, employers, insurance brokers and others will easily view competing health plans side-by-side, comparing benefits, costs, provider networks and other features. This transparency and accessibility is designed to lead to more value-based purchasing as buyers are able to select the health plan, benefits structure and healthcare providers that best meet their needs and budget.

The federal government, through tax subsidies and other financial incentives, is attempting to make participation in the exchanges as appealing as possible. “Premium-assistance subsidies” will be available to certain individuals and small businesses will be eligible to receive tax credits if they buy through a state exchange. Thanks to these incentives – coupled with the inherent advantages found in an exchange – the Congressional Budget Office estimates eight million Americans will buy insurance through exchanges in 2014 with participation expected to triple by 2018.

Business owners who participate in the exchange will need to understand the “defined contribution” concept rather than the “defined benefit” approach in structuring their health benefit program. In this way, employers will empower their employees to choose from among the multiple carriers offered within the exchange. Employees will also choose from bronze, silver, gold, and platinum plans, each having a different set of benefits and a different price point. Among these options will be a high-deductible plan (usually with a health savings account component) for those who want the lowest possible premium and the highest possible personal accountability for use of their healthcare dollars.

We know from experience that defined contribution, coupled with a health insurance exchange, works well. Some public exchanges (Massachusetts and Utah) are already up and running, while the country’s most successful private exchange for small groups has been growing market share for more than 15 years, currently providing coverage for 10,000 employers and 150,000 individuals.

Toward that end, a May 2011 Mercer Perspectives report predicts that a growing number of employers will move to defined contribution for health benefits. The report said the case for a defined contribution design is built on four advantages: it will generate savings over time, it can be easily administered, it aligns with pay and other benefits, and it provides transparent value – the specific premium contribution for the medical plan coverage – that can be easily understood by employees.

What Brokers Need to Know

As defined contribution grows in popularity and acceptance, there are some very important things for brokers to know. First, the coupling of defined contribution with health insurance exchanges is attractive to employers. Business owners like defined contribution because it provides cost predictability and cost controls. It also gives their employees what they want – choice and removes from the employer the impossible task of finding one health plan that will please everyone. Many employers also like the exchange concept because it provides ease of administration and a single point of contact. Ideally, this includes a user-friendly, single entry Internet portal where consumers and small businesses can access online and multilingual enrollment, online renewal and online changes in coverage. And don’t forget, certain small businesses will be eligible to receive tax credits if they buy through a state exchange.

New competitors are entering the market. While all defined contribution plans share the fundamental concept of shifting the responsibility for the selection of the health plan from employers to employees, not all defined contribution plans are the same. There may be differences in the enrollment process and the customer support tools. That’s why it is so important for brokers to take the time to understand the differences before they sit down with their clients. Review the exchanges and the options carefully and remember that the creation of state-run exchanges in no way prevents or eliminates the existence of private exchanges.

Health insurance exchanges will have a profound effect on how employers select and buy their healthcare. With the introduction of health insurance exchanges, employers who have not provided health insurance in the past may finally find themselves with the means to offer this benefit in a way that is fiscally sound.

The time to start positioning yourself as the go-to expert with your clients is now. Make sure your clients know about health insurance exchanges and what tax credits and or subsidies may be available. In the PPACA world it will continue to be advantageous for employers to purchase their health insurance coverage through a trusted, licensed and qualified broker; and if you can begin to get your clients interested in this concept now, you’ll be the person they turn to when the time is right.

Today’s consumers want choice in every purchasing decision that they make – from cars to clothes to computers. It is not surprising that they also want choice, control and flexibility in one of the most significant decisions they will ever make for themselves and their families – how their healthcare dollars are spent. At the same time employers (especially in this tough economy) need to find a way to control all of their operating and administrative costs and an obvious target is healthcare, which, for some employers, is their largest single line item after salaries.

If ever there was a right concept at the right time, it is defined contribution, which today is more and more making a lot of sense to a lot of people. The introduction of state-sponsored health insurance exchanges is only going to accelerate the growth and popularity of this approach that benefits employers and employees. It can benefit brokers, too, if they are knowledgeable about the concept, equipped to endorse its value, and savvy enough to seize this burgeoning opportunity. q

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Ron Goldstein, CLU, is president and chief executive officer of CHOICE Administrators, the nation’s leading developer and administrator of health insurance exchanges.

Wellness–Help Your Clients Improve Business Performance With A Healthier Workforce

by Tom Carter

Nothing is more obvious when it comes to navigating today’s healthcare marketplace – brokers who focus only on delivering value through selling health insurance plans could be left in the cold. Businesses of all sizes are seeking expertise to build a sustainable benefit strategy and a healthier workforce. Brokers who can advise employers on these issues will have an edge over those who merely discuss rates, spreadsheets, and renewals.

Rather than having a transactional conversation, strive for a transformational dialogue by engaging the client in a discussion on how to improve business performance by improving their employees’ health.

The Advisor’s Evolving Role

Insurance professionals who want to distinguish themselves as trusted advisors need to address the very real issues of how improving employee health can improve productivity and retention – factors that offer a competitive advantage in today’s business environment.

Employers want their trusted business advisors to demonstrate effective ways to create a healthy workforce that can improve productivity and bottom-line performance. You can create a clear value for clients and become a better business advisor by focusing on three key elements:

1) Become an expert on workforce health. Attend seminars and Webinars on improving employee health and productivity. Do your clients understand what kind of chronic health conditions employees have and how it affects their business?

2) Offer strategies: Educate clients on how to implement and maintain workforce health programs. As with safety and health programs, survey the site. Your clients may have posters that encourage safety, but do they have any posters that encourage healthy habits? Also, check out the contents of vending machines and food served at the cafeteria. Do employees have a refrigerator to store healthy meals or snacks?

3) Become an advocate for total health and productivity: Employees need access to preventive care and quality physicians. Seriously consider implementing a workforce health program at your own firm to gain first-hand knowledge of the true benefits.

Understanding How Health Affects a Business

To appreciate how health affects productivity and the cost of doing business, it’s important to understand the main factors behind productivity losses – absenteeism and presenteeism. It is equally important to consider what can be done to offset or reduce those losses.

Health and productivity management offers a new model of collaboration among employers, employees, the healthcare delivery system, and the community

Absenteeism

Absenteeism involves the occupational and non-occupational reasons for employee absence or sick leave. An employee absence can delay a project, result in the need to hire a replacement worker, or lead to lost revenue if a business has to turn away a customer as a result. Chronic health problems, which are often preventable, can cause an employee to miss more than 10 work days each year, according to a study by the American Hospital Assn. Total direct and indirect costs of employee absences average 35% of an employer’s base payroll, according to a 2010 Mercer/Kronos survey. It’s important for businesses to understand the reasons for sick leave in order to support workers and reduce absenteeism.

Presenteeism

Presenteeism is the loss of productivity that occurs when employees come to work while ill and can’t perform well. It’s easy to see how productivity suffers when employees are out sick. But presenteeism can also hurt the bottom line. Presenteeism can occur due to a variety of reasons including illness, a chronic condition, concern about an ill family member, or just the effort that goes into coordinating and managing healthcare. Presenteeism can cut productivity by one-third or more. In fact, at $150 billion a year, productivity losses from presenteeism costs U.S. companies much more than absenteeism does, according to the Harvard Business Review.

Health & Productivity Management

Forward-thinking advisors are helping businesses implement benefit strategies that incorporate prevention, education, care for chronic conditions, and workforce programs to improve employee health. Clearly, the best defense against lost productivity and reduced margins begins with an investment in employee health.

The Business Advisor’s Role in Educating Clients

Many employers do not understand how much poor health affects their business performance because they haven’t been educated about it. The role of the business advisor is to initiate a conversation about this issue and demonstrate a genuine interest and capability to help a business thrive. The broker can do this by surveying employees, making sure healthy choices are available to employees, and offering an integrated health plan that supports a healthy and productive workforce. This entails re-bundling existing services to leverage an employer’s ability to use wellness as a productive business strategy.

For example, you can help your clients understand what poor health means to a business by asking whether a medical condition has ever affected a key employee or affected business performance. You can also ask if they think that the health condition could have been avoided.

The employer may say that that the CFO had a heart attack last year. He was overweight and smoked. Everyone knew it was only a matter of time. The ripple effect of his absence meant that everyone had to pick up the CFOs responsibilities unexpectedly, which left them wondering when and if he would return. Having this conversation is a great way to get the employer thinking about hidden and unexpected healthcare costs and how health and productivity management can prevent such a scenario.

The Case for Workforce Health and Safety

Virtually all businesses appreciate what workplace safety is all about. Employers understand that a decrease in disability cases equals financial savings. This concept can be translated easily to health. And who better than the business advisor to make the case for it? There are substantial benefits in tying health and safety together since their disciplines and advantages are very similar.

For example, you could propose that your client expand the role of the safety committee or manager to include health. This could involve making sure that vending machines have healthier choices, providing healthy eating guidelines at staff meetings, and starting a walking club. None of these workplace health enhancements cost money, but they help transform the way an employer thinks about the workplace and employee health – as a business imperative. This is a change in company culture.

Shifting to the Business Advisor Mindset

Clients will need their brokers to help them through healthcare reform, but that’s not the only challenge. Similar to what happened in the travel industry, there will be even bigger changes on the horizon, such as innovations in technology. Case in point – anyone can buy an airline ticket on the Internet without any help from a travel agent. Yet many travelers will still turn to travel agents who offer specific advice and expertise for value-added enhancements.

The best way to become the broker of tomorrow is to stay ahead of the curve by being a business advisor, anticipating client needs, and focusing on employee health as a business strategy. Sedentary lifestyles and poor nutrition are prevalent in today’s society and these poor health practices need reversing. As a health benefit advisor, you are in a great position to inspire change and guide employers to build their own culture of health in very simple, but effective ways.

Tom Carter is vice president of Sales and Advisor Relations for Kaiser Permanente. In this role, Tom uses his 28 years of health industry experience to lead the California key sales and business advisor development strategies.